Comfort Vs. Profitability

CHICAGO — Technology and the coin laundry business: They’re like oil and water — they just don’t mix. I believe that 75% to 80% of laundry owners think that’s true. We work in an industry that has not caught on to modern technology.I don’t know what that says about our marketplace, but let’s look into what it might mean. Manufacturers have offered the technology for about 25 years.I would like to think that after all these years we would be really high-tech. Why has our industry avoided these changes? I would like to share my thoughts with you and see if they make sense.COMFORT LEVELThe owners of existing businesses just don’t like change. It’s difficult enough to sell brand X equipment to an existing brand M buyer and vice versa, because the owner would lose his or her comfort level with a new product, such as the serviceability, etc. The owners just don’t want to learn about a new brand of equipment, so they don’t.Now, let’s just multiply that by adding a computer or a digital control and the stress level rises. It becomes easier to keep what you feel comfortable with and are knowledgeable about than to change. I hope you noticed I never mentioned a laundry owner in my example about change. It’s because you can substitute any existing business owner. They all have the same concerns.No business owner likes to go outside his/her comfort level. What forces an owner to go outside of the comfort level is when the gain is greater than the potential loss. The loss is, of course, the sense of being uncomfortable. So we need to make the gain — the profit — far outweigh the loss. Getting an existing owner to realize there is a loss is the toughest task.I approach the subject this way: when you make a decision in the laundry business, it’s normally a long-term commitment. When we purchase new washers, dryers or water-heating equipment, we hope they will give us dependable and economical service for a long period of time. We only buy equipment every seven to 10 years. As much as we think we can, no one can predict what the future will bring. We constantly face increasing utility costs, higher rents and higher wages. We should realize that these higher costs will continue in the future.So when we are in the purchase mode, we need to buy the latest design, the most economical and the most feature-rich equipment that is available. When we make a buying decision, we expect it to give us the best profit potential in the future. We don’t buy the same equipment that was engineered 30 years ago, and if we did, we will lose profits.MODERN LAUNDRIESAll washer and dryer manufacturers have developed new, energy-efficient equipment that allows different pricing for different levels of service. You might say, “I don’t need that,” or “My customers will be confused.” That’s understandable. But since we can’t predict the future and we certainly don’t want to purchase new equipment again, utilizing those features might be the only way to be profitable in the future. The chance of loss is the reason you should utilize today’s higher-tech equipment. Hedge your future profit potential. The fear of the unknown is a powerful motivation to keep you technologically in the ’70s, but I urge you to look hard at the new innovation available to make your business as profitable as it can be.The cost of opening a new laundry is on the rise. Storeowners need to take advantage of technological advancements in order to maximize profits, Marcionetti believes.Today, the cost of starting a laundry is quite high. The cost of a laundry build-out has doubled in the past 10 years and if that trend continues, it will double again. Operating costs are higher and wages are rising. Start-up costs today can be anywhere from $350,000 to $1 million.New investors who purchase these stores look at all the available technology and welcome any energy-efficient or computer-controlled washers and dryers. Since they don’t have any preconceived industry thoughts, they are open to new technology. The benefits of this technology not only reduce energy costs, but give us a vehicle to raise our volume and profits. In order to maintain this as a viable and profitable industry, new technology must become part of our business plan.Other than washers and dryers, I believe the two biggest innovations are efficient, computer-controlled water-heating systems and card systems.A major amount of the gas used in a laundry heats water. You have 95-99% efficient water heaters that are precisely controlled by a computer, are easy to install and will provide many years of service. It would be a good business decision to take advantage of this new technology when replacing your old water-heating system. If you would like to save an enormous amount of money on your gas bill, consider replacing your heating system right now.Card systems are being installed in a majority of today’s new stores. I believe this trend will continue. I covered the benefits of the card system in my last column. The card system provides the owner with flexibility and control over the entire operation. The system also allows you to market the laundry. In addition, new investors, who have the capital but not the time to collect the money, feel comfortable with the system.Today’s technology in microprocessor-controlled washer-extractors and highly efficient drying tumblers have owners gaining not only additional profit opportunities, but also cost savings through the efficient use of utilities.Washer-extractors with such programmable controls more effectively meter water and hot-water usage than if they had mechanical controls. Likewise, modern axial airflow drying tumblers produce faster drying results with more efficient use of gas. The end results are overall lower water and utility consumption.In today’s economy, I would not own a store that was not built with the latest technology available. That includes washers, dryers, water heaters and a card system.Dion Marcionetti is president of Laundry Concepts, a Huebsch distributor, and Card Concepts Inc., a Chicago-area manufacturer of debit card systems for coin laundries. Marcionetti, a 35-year industry veteran, is also active in the Coin Laundry Association (CLA).